Wednesday, April 29, 2015

Learning Economics Through Pictures - Economic Growth under Reagan and Obama

Story here.

The photo here (Source - The Gateway Pundit):

Great Obama quote (but he could have said more)

The quote here:

In communities where there are no fathers who can provide guidance to young men; communities where there’s no investment, and manufacturing has been stripped away; and drugs have flooded the community, and the drug industry ends up being the primary employer for a whole lot of folks — in those environments, if we think that we’re just going to send the police to do the dirty work of containing the problems that arise there without as a nation and as a society saying what can we do to change those communities, to help lift up those communities and give those kids opportunity, then we’re not going to solve this problem.

Wow - I agree with Obama!  I think he should have added that many of these problems are the direct result of government programs.  For example, many welfare programs give people an incentive to not work and punish people for working.  When parents take advantage of those programs you then will have children who don't grow up with a strong work ethic.  (Which creates a "cycle-of-poverty".)  That can lead to the lack-of-skills that will keep investors out and make drugs look like the best job alternative.

Throw in failing government-run schools, and you have a recipe for disaster.

Monday, April 27, 2015

Is NY's fracking ban temporary?


In the radio interview Friday, Martens said the fracking ban — which applies only to fracking that uses more than 300,000 gallons of fluid — will be "permanent until the information changes." Studies that have been in the works for years may draw different conclusions when they're finally released, he said.
"I don't think there's any such thing in the environmental world as permanent," Martens said. "Information changes."
In theory, Martens is correct. NY could reverse their decision. However, 20 years after GM foods have become widespread, the confidence in the safety of GM foods among scientists could not be stronger. The evidence, notably that we have never had anybody ever get sick from GM foods, indicates GM foods are safe, but many people (including many who also dislike fracking) are still opposed to GM foods.

Why should we believe that the same people who dislike GM foods now would like fracking 10 years from now, even if all evidence indicates that fracking is safe?  

Thursday, April 23, 2015

Forensic Economics Course

During the last three weeks of the semester this year, I got the opportunity to teach forensic economics in a course titled "fraud and forensics".

We have 9 class sessions together, where we work well beyond these videos, but these introductory videos were use in this "flipped" class.


Calculating Present Value and Future Value (parts one and two)

Friday, April 17, 2015

Link to radio interview

I had a 10-minute interview with WKOK radio.  The link is here (for now).  You'll have to scroll to the Monday (April 13) clips to find mine.

I'll see if I can find a permanent link soon ...

Tuesday, April 14, 2015

Lousy analysis from UC Berkeley

UC Berkeley publishes a study titled: "Poverty-level wages cost U.S. taxpayers $153 billion every year"

While the U.S. economy rebounds, persistent low wages are costing taxpayers approximately $153 billion every year in public support to working families.

“When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs,” said Ken Jacobs, chair of the labor center and co-author of the new report. “This creates significant cost to the states.”

OK, so what's wrong with this?  

1. If you set up government welfare programs that are too generous, don't blame firms when people use them.

2. Firms are going to pay what people are worth.  They will be greedy.  Hedge funds are greedy, but they pay 6-figures and 7-figures to their workers.  Why?  Because that's what they are worth in terms of profit and they'd be hired away if they offered less.  Fast food restaurants, on the other hand, will pay minimum wages.  People who make the minimum wage have a skill set that doesn't enable them to be hired by other firms for more.  Why would we blame firms when people are so unproductive they won't be hired for more than the minimum wage?

The study was funded by "Service Employees International Union" which helps explain it.  This is just a case of a union paying off professors to write a favorable report.

The one thing I do agree with is that if more people earned more money, public assistance would be lower.  The policies to help bring higher wages would be to decrease the minimum wage and to reduce welfare payments that discourage working.  Higher minimum wages and the other policies this union would support would only lead to more public assistance.  

Berkeley used to be known as prestigious.  Some might still think so, but they're wrong.  With the moronic behavior of their students (for one of many examples, see here) and the stupidity of the employees who write reports like this, I would send my children to just about any other public or private school in the US before I'd send them to UC Berkeley.